S Korea to invest over $8bn to foster EV export sector

Market: Battery materials, Metals
26/09/23

South Korea's trade, industry and energy ministry (Motie) plans to "spare no support" to foster electric vehicles (EVs) as a key export engine, with 11.1 trillion won ($8.22bn) to be invested in the sector.

Motie will invest W2 trillion in research and development in the automobile sector over the next five years to support its "timely transition to future vehicles", it said on 26 September, adding that W9.1 trillion will be provided to finance conversion to "future cars".

Motie also hopes to expand ‘eco-friendly' vehicle export bases in northern Europe and Japan to support the inclusion of small and medium-sized EV part companies in global supply chains.

The country's automobile exports have remained strong and achieved double-digit year-on-year growth rates for 14 consecutive months in August, with exports surpassing 300,000 units in August and EVs accounting for one-third of total exports.

"In the future, the eco-friendly market will continue to grow thanks to the global carbon neutrality policies such as the US IRA and the withdrawal of internal combustion vehicles in the EU," Motie minister Bang Moon-kyu said. "The electric vehicle industry is a key industry that creates demand for various high-tech industries such as secondary batteries and semiconductors." Bang took over as the Motie minister from previous minister Lee Chang-yang in September.

South Korea was the largest importer of Chinese lithium-nickel-cobalt-manganese oxide (NCM) in January-August, making up 64pc of China's total exports of 67,252t. China also exported 125,771t of NCM precursor over January-August, with about 99.5pc exports going to South Korea. NCM and NCM precursors are used in EV batteries.

The country has been prioritising spending on measures to bolster its economy, such as higher funding allocated to green growth engines in its environment ministry budget, as South Korea continues to face economic uncertainties.

Separately, domestic producer Hyundai Steel decided on 26 September to invest W14bn to set up a steel pipe subsidiary in October. This could stimulate the firm's hot-rolled coil (HRC) import demand as HRC is used to produce steel pipes, a Chinese mill manager said.

By Tng Yong Li

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